Hidden rental car fees catch consumers when they are vulnerable
When Frank Keel last rented a car at the Salt Lake City International Airport, he had a surprise waiting for him.
"They tacked a fee on that wasn't quoted in the online reservation," says Keel, a federal government employee who rents about 30 cars a year.
Keel complained, but agents at the rental place said they couldn't do anything about it.
He asked what the charge was for and was told, "This is for the wheels on the car."
"I've seen some ridiculous fees, but this beats them all," he says.
Car rentals are a $23.63 billion industry in the United States, with 1,857,000 cars in service in 2012, according to Car Rental News. That is $7.2 billion more in revenue than 10 years earlier. As renting cars becomes more accessible and as fees expand, it becomes more important to know how to save money and avoid fees and getting stuck with unexpected charges that can run into the thousands of dollars.
Hertz is an example of accessiblity increasing. The rental car giant just announced it is expanding the locations where it will have vehicles to rent as it competes with car sharing and hourly rental places like Zipcar and with other companies, such as Enterprise, that have a greater local presence.
Unbundling tons of fees
Neil Abrams, founder of Abrams Consulting, a car rental consulting and travel market research organization, says that 20 years ago, car rental companies would bundle all of the various fees into the rental rates. He says it was "confusion among customers" who wanted to know the details of the costs that led to the unbundling of the fees.
Now companies list fees and taxes such as special taxes for local projects, airport concession fees, vehicle licensing fees and, as Keel learned, even tire disposal fees.
All these fees, Abrams says, could be as much as 40 to 50 percent of the final cost to rent the car.
Rental car businesses are not particularly happy about having to tack on fees for convention centers, stadiums, museums, light rail and other local projects to the costs of their products. But since these fees are imposed by the government or by the airport, there is little that can be done to get around most of them.
Airport fees are an exception. By using a free shuttle or a ride from family or friends to a rental car office away from the airport, a person could save 8 to 12 percent of the total cost.
Christopher Elliott, a consumer advocate who writes the "Travel Troubleshooter" column, says there has been an explosion in car rental fees.
"You almost don't know where the next fee is coming from," he says. "If they really wanted to, they could have a price that includes everything. They say it is a service to break it all out. But it makes their prices look lower and makes us believe we are paying less."
While government and other outside fees don't help out the car rental companies' bottom lines, there are other add-on fees that may.
Barry Maher , a motivational speaker who rents 25 to 30 cars a year, remembers his first encounter with prepaid gas fees. It sounded like a good idea.
"What they didn't tell me was I wasn't paying for just the gas I was going to use, but for the full tank," he says. "I only drove the car 50 miles."
Elliott cautions people who are doing the traditional bring-the-gas-tank-back-full option. He says some rental places will charge for a full tank of gas unless there is a receipt — even if the needle is on full.
Unsure about insurance
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